The 3rd Circuit handed Broadcom a win in the chipmaker's antitrust battle against rival Qualcomm, reversing a district court decision that dismissed the suit. The appeals court reinstated two of Broadcom's six claims relating to Qualcomm's alleged pursuit of a monopoly through unfair patent-licensing practices.

The European Telecommunications Standards Institute (ETSI) agreed to include Qualcomm's technology in its Universal Mobile Telecommunications System (UMTS), the 3G standard used in GSM technology. Standards-determining organizations such as ETSI decide on industry-wide communications standards so that wireless equipment can interoperate.

ETSI requires vendors whose technologies are included in the standard to license their technologies “on fair, reasonable and non-discriminatory terms.” Broadcom alleged Qualcomm ignored its promise to adhere to those terms.

Broadcom accused Qualcomm of attempting to build a monopoly by charging competitors and customers using non-Qualcomm-manufactured chips “discriminatorily higher” royalties as well as withholding favorable pricing and coercing cell phone manufacturers to purchase only Qualcomm-manufactured UMTS chips.

Judge Maryanne Trump Barry said that Qualcomm made an “intentionally false promise” when it agreed to fairly license its technology. That promise, which Qualcomm breached, Barry added, was one of the reasons ETSI chose to use Qualcomm's technology as the standard.

Accordingly the court held Qualcomm's practices make up “actionable anticompetitive conduct” and remanded the case to district court.

“Deception in a consensus-driven private standard-setting environment harms the competitive process by obscuring the costs of including proprietary technology in a standard and increasing the likelihood that patent rights will confer monopoly power on the patent holder,” Barry wrote.

The 3rd Circuit handed Broadcom a win in the chipmaker's antitrust battle against rival Qualcomm, reversing a district court decision that dismissed the suit. The appeals court reinstated two of Broadcom's six claims relating to Qualcomm's alleged pursuit of a monopoly through unfair patent-licensing practices.

The European Telecommunications Standards Institute (ETSI) agreed to include Qualcomm's technology in its Universal Mobile Telecommunications System (UMTS), the 3G standard used in GSM technology. Standards-determining organizations such as ETSI decide on industry-wide communications standards so that wireless equipment can interoperate.

ETSI requires vendors whose technologies are included in the standard to license their technologies “on fair, reasonable and non-discriminatory terms.” Broadcom alleged Qualcomm ignored its promise to adhere to those terms.

Broadcom accused Qualcomm of attempting to build a monopoly by charging competitors and customers using non-Qualcomm-manufactured chips “discriminatorily higher” royalties as well as withholding favorable pricing and coercing cell phone manufacturers to purchase only Qualcomm-manufactured UMTS chips.

Judge Maryanne Trump Barry said that Qualcomm made an “intentionally false promise” when it agreed to fairly license its technology. That promise, which Qualcomm breached, Barry added, was one of the reasons ETSI chose to use Qualcomm's technology as the standard.

Accordingly the court held Qualcomm's practices make up “actionable anticompetitive conduct” and remanded the case to district court.

“Deception in a consensus-driven private standard-setting environment harms the competitive process by obscuring the costs of including proprietary technology in a standard and increasing the likelihood that patent rights will confer monopoly power on the patent holder,” Barry wrote.